Brierley makes new offer for Kirkcaldie assets at 7% premium
Sir Ron Brierley's Mercantile NZ has given notice of a new offer for the cashed-up former retailer Kirkcaldie & Stains [NZX: KRK], amounting to a 7 percent premium on its last traded price but still below the wash-up value of the business.
Mercantile, the third-largest shareholder in the company now called Wellington Merchants, would offer $3.45 per share cash for the remainder. Merchants stock last traded at $3.22.
Brierley's approaches have so far been spurned by the directors of Merchants. Mercantile NZ originally offered $2.75 cash a share for the rest of the company, above the $2.20 a share Brierley paid to increase his stake in late 2015. In April, the board recommended shareholders not sell, and has repeated that recommendation twice since Mercantile increased its offer to $3 per share.
The former Kirkcaldie site on Wellington's Lambton Quay is now occupied by the first New Zealand branch of Australian retailer David Jones. The cashed-up Merchants had to exit lease obligations on other properties before it could settle on the amount available for distribution to shareholders. On June 1, the board lifted its estimated return to shareholders to a range of $3.50 to $3.60 a share, from a previous range of $2.99 to $3.49.
Brierley set a minimum acceptance level for the offer of achieving more than 50 percent of the stock. The biggest shareholder is H&G Ltd, a company owned by Selwyn and David Cushing, with 19.6 percent. LQ Investments, a company with a range of high-profile Wellingtonians as shareholders including accountant Michael Curtis and lawyer Colin Carruthers, holds 19.5 percent and Mercantile owns 9.9 percent.
Shares in Wellington Merchants have risen by 106% since the start of the year.
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